The impact of transformational leadership on project success

an empirical study using structural equation modeling across twenty-eight nations

AN EMPIRICAL STUDY USING STRUCTURAL EQUATION

MODELING ACROSS TWENTY-EIGHT NATIONS

 

 

Guru Prakash Prabhakar
ESC Lille, France

Introduction

A trend is emerging within contemporary project leadership: Today’s project manager is increasingly using the transformational leadership approach common to general management. This study is one of the first to model transformational and style leadership across projects in various organisations and in several countries. And the results suggest several interesting and important avenues for further research: That the combination of transformational leadership and the relationship aspects of the style approach are employed either concurrently or consecutively.

This paper documents a two-phase empirical analysis of the project management leadership practices used on 153 projects across 28 nations. During phase one, I studied 46 projects within 14 nations; during phase two, I studied 107 projects from 25 nations. My goal was to examine the role that project leadership and team related factors play in achieving project success. This multinational—and thus multicultural—study attempts to represent the present-day multidisciplinary project environment.

I used the data that I obtained from analyzing phase one to develop the questionnaire I used during phase two, a questionnaire that further explores the links between the different aspects of project leadership and project success discovered during phase one. This study also highlights results supporting the view that time is an important element in the leadership.

I conclude by identifying a list of factors that demonstrate the impact critical leadership factors have on project success. I also discuss how structural equation modeling (SEM) affects these critical team leadership factors. In developing this model, I used software manufactured by LISREL and SPSS.

Theoretical Background

Project-oriented organisations are increasingly focusing on effective leadership as an important success factor. In doing so, many are assessing how their project managers resolve extraordinary situations and unforeseen problems (Pinto, 1986; Pinto & Slevin, 1988a; Zielasek, 1995). Concurrent with this activity, project management researchers are attempting to identify successful behaviours, as human aspects of project management are clearly recognised as being important (Gemuenden & Lechler, 1997; Lechler, 2000).

Project leadership appears consistently in the highest-ranking category amongst Project Management Competence Factors. Project leaders should therefore display the leadership traits that will affect their overall project performance (Odusami, Iyagba, & Omirin, 2003). Verma (1997) suggested that a leader’s ability is determined by their success in achieving their goal. It is the aim of this study to investigate the relationship between project leadership approaches and project success, regardless of industry, budget, culture, or geographic area. In doing this, this research addressed two questions.

  • Which leadership approach leads to a higher level of project success?
  • How do leaders switch between different leadership approaches to be more successful?

Because human behaviour is complex, it is a difficult—if not impossible—task to generate solutions to these questions that apply to all projects, regardless of culture, geography, age, sex, religion, and personality. While good leaders display confidence in themselves, great leaders inspire confidence in others, a confidence that enables them to often exceed their normal performance level. Bass and Avolio’s (1994) definition of leadership describes the action of transformation.

One constant in successful leadership that can be established is the project manager serving as the project team’s role model. This alone does not, however, enhance project performance. The project manager should also display flexibility in his leadership actions towards certain team members, switching his behaviours to accommodate individual relationships. This paper also explores the two facets defining a successful project manager leadership approach.

Previous studies on project success (Gemuenden & Lechler, 1997; Murphy, Baker, & Fisher, 1974; Pinto & Slevin, 1988a, 1988b; Shenhar, Levy, & Dvir, 1997) appropriately address the factors affecting project success. Murphy et al. (1974) examined 650 United States (US) projects (aeronautical and construction, among others) and Pinto and Slevin (1988b) assessed 409 projects from various US industries; Gemuenden and Lechler (1997) discussed 448 German projects, and Shenhar et al. (1997) studied 127 Israeli project managers.

Methods

The data for this study was gathered through two different questionnaires distributed to project managers across two phases. Phase one generated 46 responses from 225 contacts (a response rate of 20%); phase two generated 107 responses from 400 contacts (a response rate of 27%). Together, these averaged a response rate of 24% and combined as N = 153. In order to create a representative theoretical sample, I contacted a diverse mix of potential respondents .

These respondents were targeted across 28 countries (please see Appendix A). After my initial contact with the project managers by e-mail and, in some cases, by telephone, I mailed the respondents my questionnaires either via e-mail or postal mail. I implemented this during two phases., Respondents provided details about their most recently completed projects. This approach provided me with balanced responses and limited the possibility of obtaining skewed results (i.e., of respondents discussing only their best projects).

Demographic Data of Phases 1 & 2 Combined (sample size = 153)

The sample of projects represents a balanced selection of industries, as illustrated in Exhibit 1:

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Exhibit 1.

The average age of the responding project managers was 38 years; the mean of professional experience was 9 years. Based on the information they provided, project lasted an average of four phases over 57 weeks; budgets averaged €16.4 million.

Age No. of weeks Budget Experience Phases
38 57 € 16,387,915 6 4

Phase 1

The responses I garnered during this phase were more qualitative in nature. To generate the responses from the 46 project managers participating in this phase, I administered the questionnaire and conducted interviews. I used the Jerrell and Slevin leadership instrument (Slevin, 1989) to develop questions asking the project managers about their predominant leadership style. I asked the project managers if they changed their style. If they had, I asked them if their change was motivated by time, tasks, or pressures.

I identified the most successful leadership style in relation to Pinto and Slevin’s 12-Factor Model (1988b). This model is professionally perceived as the best current measure available in the field; It empirically proves—and is closely linked to—the project implementation stage. Its scale is based on the reported opinions of a large number of project managers across various industries.

During phase one, I postulated and tested three hypotheses.

  • Hypothesis 1a: A switch in leadership style produces more overall success on projects.
  • Hypothesis 1b: The time factor has an impact on the choice of the project leadership style.
  • Hypothesis 1c: Projects with mainly autocratic project leadership tend to be successful.

Phase 2

In phase two, during which I garnered 107 responses that were more quantitative in nature, I explored the link between switches in leadership style and project success, using a more detailed analysis of the project manager’s leadership styles and behaviours, an analysis that is based on responses to my questions concerning leadership switches, an analysis that assesses the project manager’s switch in leadership behaviours to flexibly manage individual team members.

For this study, I used the Multifactor Leadership Questionnaire-6S (MLQ) developed by Bass & Avolio (1992). I used the MLQ to measure four transformational leadership behaviours: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. I also used the Leader Behavior Description Questionnaire (LBDQ) developed by Stogdill (1963). This enabled me to evaluate task-relationship behaviours.

During phase two, I postulated and tested two hypotheses.

  • Hypothesis 2a: There is a link between transformational leadership and project success.
  • Hypothesis 2b: The more experienced the project manager, the greater the project success.

Results from Phase 1

Hypothesis 1a: A switch in leadership style produces more overall success on projects

The qualitative data shows a relationship between switches in leadership style and a high levels of project success. This data suggests that project managers should practice switch leadership when managing projects. Eighty-six percent of the respondents reported changing their leadership approach after they started a project, changing from an autocratic style to a more consultative approach. The reasons making such a switch could result from a project manager’s awareness that the team has lost their focus or that the project is either progressing too slowly towards the desired goals, veering in the wrong direction, not moving at all, or slipping backwards.

Hypothesis 1b: The time factor has an impact on the choice of the project leadership style

There is a clear, overriding element of the set timescale in a project leadership situation. This temporal aspect provides a natural, fixed starting point from which to develop a project management leadership model and this was the angle I used for this phase. Those respondents considered successful project managers cited time as a reason for employing switch leadership, explaining that it allowed them to meet the project’s deadline. Successful project managers are, therefore, able to carefully integrate time concerns into a project. Pinto and Thoms (1999) state that personal temporal skills are important to successful project managers.

Hypothesis 1c: Projects with mainly autocratic project leadership tend to be more successful

Most respondents favoured the autocratic approach. When the project leader adopts this approach, there is not a high degree of storming on the team. Verma (1997) sees project team leaders as using a shared leadership style that emphasizes participation, empowerment, and trust. The successful project managers with whom I spoke will switch to or switch from this style but do not use it through every project phase. Fifty-three percent of autocratic leaders correctly identified their leadership style, indicating an awareness of being highly task-oriented.

Results from Phase 2

Findings from the qualitative survey in phase one helped me formulate the research strategy I used during phase two, during which I further explored the impact of various transformational leadership factors on project success. The first step of my data analysis investigates the main leadership styles and behaviours of project managers linked to project success.

Hypothesized relations between the leadership variables and project success

Exhibit 2. Hypothesized relations between the leadership variables and project success

Hypothesis 2a: There is a link between transformational leadership and project success

The transformational approach to project leadership serves as a positive role model for the project team. When project leaders adapt their style to meet the needs of individual team members, the project is more likely to achieve a positive outcome. Individual consideration is directly linked to project success (r = .29, p = .003), as is the ideal influence approach (r = .36, p = .000). (Please refer to Exhibit 2.)

Hypothesis 2b: The more experienced the project manager, the greater the project success

The more experienced that a project manager has, the more likely it is that this individual will lead a project team towards a successful project outcome (r = .20, p = .042). A strong relationship orientation also produces a more favourable outcome (r = .28, p = .003).

img

Exhibit 3.

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Exhibit 4.

I found low values for the Cronbach's Alpha of the subscales of the MLQ, which indicates that these subscales are of dubious reliability (please refer to Exhibit 4). However, the Pinto and Slevin (1988b) project success measure has an alpha value of .87, which is excellent.

The findings in Exhibit 4 indicate that transformational leaders who inspire and motivate others by providing meaning and challenge to their followers’ work (Avolio & Bass, 1995, 2002) have more project success. Bass (1998) describes the spirit of the team is aroused when the leader displays enthusiasm and optimism. The transformational leader builds relationships with followers through interactive communication, which forms a cultural bond between participants and leads to a shifting of values toward common ground. The leader inspires followers to see the attractive future state while communicating expectations and demonstrating a commitment to the project goals and to a shared project vision.

Project managers who are relationship-oriented generate more successful projects (r = .28, p = .003). Hersey and Blanchard (1977) suggest that leaders need to display more relationship-oriented behaviour in some instances and more task-oriented behaviour for other situations. In the present research, although a strong correlation was found between relationship-orientation and project success, I found no direct link between project manager task-orientation and project success (r = .08, p = .423).

img

Exhibit 5.

The leadership decision-making approaches of the respondents (Exhibit 4) suggest that project managers prefer an autocratic style of leadership. This does not correspond to the findings of Odusami et al. (2003), which shows that respondents were more inclined towards a democratic style. This discrepancy can perhaps be best explained by the demographic profile of the respondents and the type of industry. Odusami et al. (2003) studied 60 project managers in the Nigerian construction industry, whereas results in Exhibit 5 are based on 107 respondents from 25 countries who are working in a variety of industries. The choice of leadership style is, therefore, perhaps affected by industry-specific or intercultural issues.

Results of regression analysis suggest that the 51.7 % (r2 = .517) of variance in project success is explained by the following mentioned nine variables. The first six are continuous; the remaining three are dichotomous. (Please see Appendix B for details):

  1. No. of years of project experience
  2. Relationship orientation
  3. Idealized influence
  4. Individual consideration
  5. Inspirational motivation
  6. Intellectual stimulation
  7. The team understands the technology and expertise required to accomplish the specific technical action steps.
  8. The project manager does not remind the team that they have a good incentive program in place to reward their efforts.
  9. The project manager does not exercise managerial authority over the team to improve performance.

Structural Equation Modeling (SEM)

Strategic management research often involves the evaluation of one or more models that have been developed based on a theory that proposes relationships among some or all of the variables in the model. SEM was introduced into the discipline of strategic management in the mid-1980s by Farah, Hoffman, and Hegarty (1984). I tested the hypotheses with SEM, using LISREL (Linear structural relationships) software because it effectively estimates the model’s factors as it tests a complex model’s structure of functional relationships between observed and latent variables. The functional relationships are described by parameters indicating the magnitude of the effect that independent variables have on dependent variables. SEM is a powerful technique in terms of the inferences it allows. It uses a causal diagramming approach and helps users obtain more information regarding the generalizability of a model across various cultures. It also helps assess the relative importance of factors in a theoretical model for different cultures (i.e., the contingent effect of culture). The requirements of scale and normality are often difficult to meet with social sciences data; however, the requirements are not always prohibitive (Chou & Bentler, 1995).

Although sample size requirements for SEM are generally rule of thumb, it is still an important consideration. A sample size of 100, 200, or even more subjects is considered good enough to deduce certain logical conclusions (Boomsma, 1982; Marsh, Balla, & McDonald, 1988). According to Laura (2002) and Thompson (2002), the necessary sample size for reliable results depends on the complexity of the model, the magnitude of the coefficients, the number of measured variables associated with the factors, and the multivariate normality of the variable distribution. In Exhibit 6, I provide a tentative model displaying the impact of critical team leadership factors on project success using SEM.

Results from SEM

Exhibit 6. Results from SEM

Discussion

“Leadership behaviors are flexible. It would be a mistake to assume that once identified as possessing a certain style, it is impossible to alter that style for different circumstances or situations. In fact, successful project managers have been shown to employ a great deal of flexibility in their use of leadership approaches.” (Slevin & Pinto, 2004, p. 74)

Qualitative data from phase one suggests that project managers exercise switch leadership, consciously or not, with the aim of producing a more successful outcome. I continued this investigation during phase two using quantitative methods and found no significant correlations stemming from the sample data. There are no clear indications establishing the impact of switch leadership on project success.

The data I obtained from phase two shows that relationship-oriented project managers are more able to leverage the idealized influence transformational leadership approach (r = .31, p = .001). This data supports the current view that reactive, one-dimensional project managers will find that their leadership style may work well under some situations and not work for others (Kangis & Lee-Kelly, 2000).

My findings show that successful project managers do not constantly remind the team that they have an incentive program in place that rewards team efforts. Instead, project managers reward behaviour in regards to each team member’s motivations (r = .33, p = .001), which suggests that the project manager offers incentives on a case-by-case basis where required to correct problems. This behaviour supports the Path-Goal theory (House, 1971), whereby rewards must correspond to the needs and interests of the individual team member.

When the team understands the technology and expertise required to accomplish the specific technical action steps, the project is more successful, as shown in Exhibit 3. Yukl (2002) similarly highlights the need for the project manager to choose leadership actions according to the technical aspects of team member work. There are higher scores on Pinto and Slevin (1988a, 1988b) success factors when the project team views the project manager as a strong, positive role model, as one who displays the transformational leadership behaviour of idealized influence and who exercises little managerial authority. The more the team understands the technology and expertise required to accomplish the specific technical action steps, the less they need a project manager who reminds them that they have a good incentive program in place (r = .35, p = .000). There was a link between project managers who display inspirational approach and their ability to quickly identify and solve team problems (r = .43, p = .000).

Although Keegan and Den Hartog (2004) suggest that transformational leadership is relevant to the field of project management, the field may need to develop new leadership theories for project managers, primarily because line managers appear to have more charismatic influence over followers.

My findings show that the project manager who exercises the transformational leadership behaviour of inspirational motivation enjoys project success. Inspiration is defined as inspiring and empowering followers to enthusiastically accept and pursue challenging project goals and the project mission. The development of a shared vision is an integral component of the idealized, transformational leader’s role (Jung & Avolio, 2000). It helps the team look towards the future while gaining group acceptance of ideas through the alignment of personal values and interests that serve the group’s purposes (Avolio & Bass, 2002; Bass, 1990, 1998; Jung & Avolio, 2000). In short, my findings show that a project manager must be a strong transformational role model for the team and display a second, more tactical approach to adapting relationship actions towards the team to achieve task success.

Limitations

In the present study, the project managers assessed their own leadership style and the views of the team were not taken into account to give a 360-degree view.

The managers gave a subjective analysis of their project success. It is possible that bias was introduced: in completing retrospections, humans cannot, or do not, always accurately recall the state of decision situations. The passing of time may add to the error of recalls.

Conclusion

Idealized influence is an important leader quality that has an impact on project success. It must be used in conjunction with relationship behaviours. Project manager experience helps develop an idea on how and when to use various styles to achieve a higher success on projects. The carrot-and-stick approach to get the work done needs to be replaced by a more humane style of project management leadership.

A leadership approach is a way of behaving to influence a group of people towards achieving a goal. Different theories could offer more useful concepts for different project situations. The challenge is, therefore, to fit the theory, skills, and knowledge of the leader to the situation. Project managers who employ transformational leadership and more specifically, idealized influence—in conjunction with a relationship-oriented approach—enjoy more project success, as defined by Slevin and Pinto (2004).

The qualitative data from phase one suggests that project managers exercise switch leadership consciously or not with the aim of producing a more successful outcome. The quantitative research generated during phased two shows no significant correlations stemming from the sample data. There are no clear indications establishing the impact of switch leadership on project success. Future research is required to further define and quantitatively relate switches in leadership approaches with success on projects.

The author is grateful for the research guidance he received from Christophe N. Bredillet, Sandra E. Walker, and Philippe Ruiz, all from ESC Lille, France.

Definitions

Experience shows the years of professional employment a project manager has.

Idealized influence indicates whether a leader holds a subordinate’s trust, maintains their faith and respect, shows dedication to them, appeals to their hopes and dreams, and acts as their role model.

Individualized consideration indicates the degree to which a leader shows interest in the well-being of others, assigns projects individually, and pays attention to those who seem less involved in the group.

Inspirational motivation measures the degree to which a leader provides a vision, uses appropriate symbols and images to help others focus on their work, and tries to make others feel their work is significant.

Intellectual stimulation shows the degree to which a leader encourages others to be creative in looking at old problems in new ways and creates an environment that is tolerant.

Project success reflects the total score a project manager receives on Pinto & Slevin’s (1988b) 12-factor model measuring project success.

Relationship is assessed using the task-relationship instrument developed by Stogdill (1963).

Switch leadership is the conscious ability to manoeuvre from one leadership approach to another to enhance performance on a project. It is more in the domain of situational leadership approaches.

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Appendix A. Countrywide distribution of data obtained from the two phases (phase one and phase two) combined.

# Country # of respondents Phase 2 # of respondents Phase 1 Total %  
                   
1 France 49 29 78 51  
2 U.S.A. 10 1 11 7  
3 U.K. 7 3 10 7  
4 India 7 1 8 5  
5 Malaysia 4 1 5 3  
6 Germany 5    5 3  
7 Morocco 4 3 7 5  
8 China 3    3 2  
9 South Africa 2    2 1  
10 Europe* 2    2 1  
11 Africa 1    1 1  
12 Canada 1 1 2 1  
13 Hong Kong 1    1 1  
14 Hungary 1    1 1  
15 Czech Republic 1    1 1  
16 Spain 1    1 1  
17 Sweden 1 1 2 1  
18 Ukraine 1    1 1  
19 New Zealand 1    1 1  
20 Mexico 1    1 1  
21 Lebanon 1    1 1  
22 U.A.E. 1 1 2 1  
23 Iran 1    1 1  
24 Thailand 1    1 1  
25 Indonesia    1 1 1  
26 Australia    1 1 1  
27 Congo    1 1 1  
28 Cameroon    1 1 1  
29 Belgium    1 1 1  
   Total responses 107 46 153 104  

*not counted as a separate country.

Appendix B. Variables introduced/eliminated

Model Variables Variables
  introduced eliminated
1 IDEALINF,  
  IDEALINF,  
  B3AGREE3,  
  EXPERIEN,  
  D4_5,  
  INTELLEC,  
  RELATION,  
  B2GOAL4,  
  INDCONS,  
  INSPIRAT.  

Dependent variable: PINTOTAL.

Summary of the model

Model R R-square Adjusted R-square Standard error of the estimation
1 .747 .558 .517 7.00914
This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

©2006 Project Management Institute

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